Digicel Files for Bankruptcy in Bermuda says it’s Business As Usual

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20200518163957

20200519

Ky­ron Reg­is

Ky­ron.reg­is@guardian.co.tt

Dig­i­cel has filed for bank­rupt­cy in Bermu­da but is in­sist­ing that it is busi­ness as usu­al.

In a state­ment, the com­pa­ny said: “We an­nounced de­tails of a pro­posed Scheme of Arrange­ment in the Bermu­di­an Courts in con­nec­tion with Dig­i­cel Group One Lim­it­ed, which is pure­ly an in­ter­me­di­ate fi­nanc­ing hold­ing com­pa­ny."

Ac­cord­ing to Walk­ers, an In­ter­na­tion­al Law Firm, “A Bermu­da scheme of arrange­ment is a court-ap­proved com­pro­mise or arrange­ment be­tween a com­pa­ny and its cred­i­tors (or class­es there­of).”

Walk­ers not­ed that a Bermu­da scheme is most com­mon­ly used to im­ple­ment a dis­tressed fi­nan­cial re­struc­tur­ing by vary­ing or com­pro­mis­ing the rights of the rel­e­vant stake­hold­ers of the com­pa­ny.

In its re­lease, Dig­i­cel said: “It’s im­por­tant to point out that this will have no im­pact on our day to day op­er­a­tions, our staff, our sup­pli­ers, our cus­tomers or any as­pect of our on­go­ing ac­tiv­i­ties - it is busi­ness as usu­al.”

Dig­i­cel ob­served that it an­nounced re­fi­nanc­ing ac­tiv­i­ties at the start of April, which, when com­plete, will strength­en the com­pa­ny’s bal­ance sheet by re­duc­ing debt, ex­tend­ing its ma­tu­ri­ties and re­duc­ing its on­go­ing fi­nanc­ing costs.

Dig­i­cel al­so said it had over­whelm­ing sup­port from its debt-hold­ers for the pro­pos­als, and it is now pro­gress­ing with the re­quired ad­min­is­tra­tive process­es.

The com­pa­ny high­light­ed that the Scheme has the sup­port of over 97 per cent of its bond­hold­ers and al­so in­volves the ap­point­ment of a light touch joint pro­vi­sion­al liq­uida­tors to over­see the im­ple­men­ta­tion of the Scheme.

Ac­cord­ing to re­ports, glob­al pro­fes­sion­al ser­vices com­pa­ny KP­MG will as­sume the role of over­sight.

The tele­com com­pa­ny pre­vi­ous­ly stat­ed that the ma­jor­i­ty of its cred­i­tors hold­ing notes ma­tur­ing in 2022 agreed to swap in­to new debt ma­tur­ing in 2024 is­sued by a new en­ti­ty. This was part of a pro­posed trans­ac­tion to cut about $1.7 bil­lion of debt.

Dig­i­cel said that it would pro­vide fur­ther up­dates on the sit­u­a­tion as it pro­gress­es.